Economic and Political Overview

flag Uruguay Uruguay: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Uruguayan economy is significantly dependent on its neighbours, Brazil and Argentina. In 2022, GDP increased by an estimated 5.3%, mainly due to an increase in tourism and in agricultural production.The economy is expected to continue growing in the coming years, albeit at a slower pace, with the IMF predicting growth of 3.6% for 2023 and 2.7% for 2024.

In 2022, inflation remained above the target of 7%, reaching an estimated 9.1%. However, that rate should decrease in 2023 and 2024, to 7.8% and 6.4%, respectively. Public debt decreased to 61.2% of GDP in 2022, but it's expected to increase to 62.6% in 2023 and 63.9% in 2024. Moreover, the fiscal deficit slightly increased to 2.7% in 2022, but it should slightly fluctuate in the coming years, reaching 2% in 2023 and 2.3% in 2024. Furthermore, the current account went into an estimated 1.2% deficit in 2022, and that rate is expected to increase to 1.9% in 2023 and 2% in 2024. The economy has diversified in the past few years with the development of the industry sector (particularly the paper industry), as well as commerce and services. The government's fiscal policies are focused on restoring business profitability as a way to encourage investment and foster economic growth. Its priorities include reducing the large fiscal deficit  through a programme involving austerity and rationalisation of public spending (particularly through a better management of state-owned companies), while maintaining benefits for the most vulnerable sectors. Other key elements are the commitment to open trade, the reform of labour relations, and regulatory and management changes in public enterprises. Although the pandemic has impacted the Uruguayan economy, it had relatively little impact when compared to other countries in the region. Still, Uruguay's fiscal measures implemented to mitigate the impacts of the pandemic have been effective in boosting economic activity, which has been gradually recovering. Looking ahead, recovery should continue, albeit at a slower pace, due to the fading impact of a low base effect, tighter monetary policy and heightened inflationary pressures.

Uruguay has one of the highest levels of GDP per capita in South America and a developing middle class. The country has had strong political and social stability for years, backed by a consolidated democracy and strong legal security, which makes it attractive to investors. Furthermore, the population living below the poverty line has decreased significantly in the past decade, from 40% in 2004 to 6.2% in 2016, due to a solid social contract and economic openness. However, there is still room for improvement in terms of financial transparency. The unemployment rate decreased to 7.9% in 2022, as the country recovered from the impacts of the pandemic, and it should remain stable in 2023 and 2024.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 71.1876.2481.0785.1389.15
GDP (Constant Prices, Annual % Change) 4.91.03.32.92.6
GDP per Capita (USD) 20,02221,37822,65923,72124,766
General Government Balance (in % of GDP) -2.0-2.9-2.5-2.3-2.1
General Government Gross Debt (in % of GDP) 59.361.661.461.761.6
Inflation Rate (%) n/a6.15.95.55.2
Unemployment Rate (% of the Labour Force) 7.98.18.08.08.0
Current Account (billions USD) -2.50-2.85-2.71-2.51-2.31
Current Account (in % of GDP) -3.5-3.7-3.3-2.9-2.6

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Uruguay’s natural resources are very limited, mainly due to country's size. There is a significant mining industry in the country, which mainly revolves around basalt, dolomite, limestone, quartz, granite and marble. There is only one gold-producing mine in Uruguay, and the country is a major producer of cement and semi-precious stones, particularly agate and amethyst. Even though only around 10% of the land is arable, agriculture is the largest export sector in Uruguay. It accounts for 6.9% of the GDP and employs 8.4% of the active population. Uruguay has rich agricultural land and almost 90% of it is devoted to livestock breeding (cattle, sheep, horses and pigs). Rice is the main crop, followed by wheat, maize, sugar cane, soybeans, and tobacco. Vegetable and fruit farming are also present throughout the country, as well as a prominent wine industry along the coast of the Rio de la Plata. Overall, 2022 was a good year for the sector, which had a triple success: good prices, good yields and good climatic conditions.

The industrial sector contributes to 18.9% of the country's GDP and employs 18.8% of the active population. Agriculture and animal food processing account for half of the industrial activity. Other manufacturing activities include beverages (especially wine), textiles, construction materials, chemicals, oil and coal. Additionally, Uruguay has recently invested heavily in the paper industry, which is expanding. Industrial activity in Uruguay registered was satble in 2022, registering the stronger growth in the construction industry.

The services sector contributes to 62% of the GDP and employs 72.8% of the active population, mainly in finance and tourism. Particularly, the region around Punta del Este attracts a large number of visitors, which has driven the rise in building, leading to a construction boom in the area in recent years. Although the services sector was hit the hardest during the pandemic, the sector registered an overall growth in 2022, with the recovery being mainly driven by commerce, restaurants, hotels, and transport.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 8.4 18.9 72.6
Value Added (in % of GDP) 7.3 17.6 63.2
Value Added (Annual % Change) -2.9 1.8 6.4

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
Monetary Indicators 20162017201820192020
Uruguayan Peso (UYU) - Average Annual Exchange Rate For 1 MUR 0.850.830.910.991.07

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
69,3/100
World Rank:
44
Regional Rank:
4

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Uruguay has an open economy and foreign trade represents 56.8% of the GDP. The country mainly exports meat (21%), soya beans (9.4%), wood (7.4%), milk and cream (5.8%), and electrical energy (5.5%). The main imports include petroleum oils (13.1%), motor vehicles (6.5%), telephone sets (2.6%), insecticides (2.1%), and mineral or chemical nitrogenous fertilisers (2%). According to IMF Foreign Trade Forecasts, the volume of exports of goods and services increased by 14.4% in 2022, while the volume of imports of goods and services increased by 20.9%.

Uruguay's main trade partners are China, Brazil, Argentina, the United States, Nigeria, and the Netherlands. The Uruguayan economy is based on industry, trade and banking services (in the capital Montevideo), as well as agriculture, livestock farming (in the centre of the country) and tourism (in the East). Uruguay is a founding member of MERCOSUR, upon which it strongly depends. The country is also a member of ALADI, a trade association that includes ten South American countries as well as Cuba, Mexico, and Panama. Under ALADI’s Economic Complementation Agreements, Uruguay enjoys and grants special preferential access to trade with Bolivia, Chile, Colombia, Cuba, Ecuador, Mexico, Peru, and Venezuela. Additionally, trade relations with Argentina and Brazil are extremely important, as those countries account for over half of Uruguay’s exports and imports, combined.

As Uruguay mainly exports agricultural products, they are highly vulnerable to international price fluctuations. In 2021, the country's exports of goods amounted to USD 9.5 billion, while imports totalled USD 10.3 billion. As for services, imports equalled USD 3.9 billion, while exports reached USD 3.7 billion. As a result, the country had a trade surplus in terms of goods of USD 3.9 billion and a trade surplus including services of USD 3.7 billion.

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 8,8938,2467,56410,32012,973
Exports of Goods (million USD) 7,4987,6806,8649,54111,185
Imports of Services (million USD) 4,5804,7513,4503,6875,101
Exports of Services (million USD) 5,4715,3573,7223,6995,449
Imports of Goods and Services (Annual % Change) 0.61.3-12.218.212.5
Exports of Goods and Services (Annual % Change) -1.14.6-16.311.711.1
Imports of Goods and Services (in % of GDP) 21.421.720.823.925.9
Exports of Goods and Services (in % of GDP) 26.527.825.230.531.3
Trade Balance (million USD) 2,3853,1132,1534,4733,452
Trade Balance (Including Service) (million USD) 3,2803,7242,4284,4863,784
Foreign Trade (in % of GDP) 47.949.646.054.457.2

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
China 21.5%
Brazil 15.0%
Argentina 8.1%
United States 6.2%
Netherlands 2.6%
See More Countries 46.6%
Main Suppliers
(% of Imports)
2022
Brazil 19.9%
China 18.1%
United States 15.8%
Argentina 11.5%
Nigeria 2.9%
See More Countries 31.8%

Source: Comtrade, Latest Available Data

 
 

Main Products

11.2 bn USD of products exported in 2022
Meat of bovine animals, frozenMeat of bovine animals, frozen 19.0%
Soya beans, whether or not brokenSoya beans, whether or not broken 17.2%
Wood in the rough, whether or not stripped of bark...Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared (excl. rough-cut wood for walking sticks, umbrellas, tool shafts and the like; wood in the form of railway sleepers; wood cut into boards or beams, etc.) 6.0%
Milk and cream, concentrated or containing added...Milk and cream, concentrated or containing added sugar or other sweetening matter 5.5%
RiceRice 4.5%
See More Products 47.8%
13.0 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 12.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.7%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 2.7%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 2.6%
See More Products 75.5%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

8.1 bn USD of services exported in 2022
49.71%
21.53%
12.04%
7.90%
3.48%
2.63%
1.01%
0.78%
0.64%
0.28%
5.0 bn USD of services imported in 2022
31.65%
27.48%
19.82%
7.28%
3.67%
2.65%
2.27%
2.20%
2.05%
0.89%
0.03%

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Official list of ministries and links
Ministry of Economy and Finances (in Spanish)
Ministry of Foreign Affairs (in Spanish)
Ministry of Industry, Energy and Mining (in Spanish)
Ministry of Transport and Public Works (in Spanish)
Ministry of Social Development (in Spanish)
Statistical Office
National Institute of Statistics (in Spanish)
Central Bank
Central Bank of Uruguay (in Spanish)
Stock Exchange
Uruguay Stock Exchange (in Spanish)
Search Engines
Uruguay Total
LoGratis
Google Uruguay
Red Academy of Uruguay
Economic Portals
Brecha

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Political Outline

Current Political Leaders
President: Luis Lacalle Pou (since March 1st, 2020)
Vice President: Beatriz Argimón (since March 1st, 2020)
Next Election Dates
Presidential: October 27th, 2024
Chamber of Senators: October 27th, 2024
Chamber of Representatives: October 27th, 2024
Main Political Parties
Uruguay has a multi-party system with three dominant political coalitions. Outside of these coalitions, it is extremely difficult for any other political party to achieve electoral success. The dominant political forces are:

- Broad Front (FA): centre-left; maintained majority since 2009; broad coalition of 21 groups, including the Movimiento de Participación Popular (MPP), the Partido Socialista (PS), and the Vertiente Artiguista (VA)
- National Party (PN): conservative party, nationalist, liberal, also referred to as the "White Party"
- Open Cabildo (Cabildo Abierto): right-wing, populist, conservative
- Ecologist Radical Intransigent Party (PERI): centre to centre-left, green politics, liberal
- Colorado Party: centre-right, a liberal and social-democratic party, the most elected party in Uruguayan history
- Independent Party (PI): centre, a social democratic and Christian socialist party, advocates "Third Way" - an alternative to the traditional left and right-wing politics
- Popular Unity (UP): coalition of left-wing and far-left, Marxist-communist, anti-imperialist
- Party of the People (Partido de la Gente): right-wing, populist, conservative
- Green Animalist Party (PVA): centre to centre-right, green conservatism, animal rights, direct democracy
- Workers' Party (Partido de los Trabajadores): far-left, Trotskyist, socialist
- Digital Party (Partido Digital): the party advocated for e-democracy and is against being labelled either right, centre, or left.

Type of State
The Oriental Republic of Uruguay is a constitutional republic based on parliamentary democracy with strong presidential form of government.
Executive Power
The President of the Republic is both the Head of State and the Head of Government, and is elected by universal suffrage for a five-year term. While the President may be reelected any number of times, immediate reelection is not allowed by the constitution.
Legislative Power
Parliament is bicameral. The General Assembly is made up of the Chamber of Senators, which is composed of 30 members directly elected to serve 5-year terms; and the Chamber of Representatives, composed of 99 members directly electedto serve 5-year terms.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
18/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Uruguay please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: December 2023